Letters

Unravelling CDC's tax payments

We note the claim made by Richard Laing of CDC (Letters, November 13) that companies in which CDC has invested "pay an estimated £250m in taxes and other charges to local governments in developing countries each year".

Of course, his claim may be right, but it is entirely unsubstantiated. CDC is itself organised as a tax-free enterprise under UK law. To ensure it preserves that benefit it invests most of its funds through tax-haven structures. The consequence is that its 2007 accounts suffered a total tax charge of £14.9m in a year, of which at least £2.4m was deferred for payment in future periods. This was on total accounting profits of £633.6m - an effective current tax rate of under 2%.

These numbers are very difficult to reconcile with the claim made as to tax paid. In that case we suggest that the company's annual reports are not fairly representing its achievements, and that it might as a result reconsider its stated accounting policy that says: "Since CDC's shares are not publicly traded, and the presentation of financial information by strategic business unit would be unhelpful in assisting the user of accounts to understand CDC's business, segmental information is not presented."

We firmly believe that this information would be very helpful, especially if presented on a country-by-country basis, and that if it, and information on tax paid by country, had been presented on this basis then the confusion that now exists as to CDC's activities might have been avoided.Richard Murphy Tax Justice Network Alex Cobham Christian Aid